From Adviser Guide:
Independent vs Restricted 1hr
Q: What impact will independence have on PI insurance?
On a direct comparison with restricted advice, the increased scope of independent advice will increase the potential for unsuitable advice or maladministration.
Andrew Power, lead Retail Distribution Review partner at Deloitte, warned as a result opting to remain an IFA may result in a comparatively higher premium for independent firms compared with restricted advice firms.
However, equally, Mr Power said the increase in professionalism of all advisers could have a downward impact on professional indemnity insurance premiums.
Mr Power said: “It is not yet clear whether the overall impact of RDR will increase or decrease PII premium for firms.”
George Higginson, chief executive of Sesame Bankhall Group, said availability of professional indemnity cover was likely to reduce – especially cover with realistic costs and benefits.
But Keith Richards, distribution and development director of Tenet Group, said the Leeds-based intermediary’s PI policy would not draw any distinction between restricted and independent adviser status.
He said this was likely to be similar across the market.
Mr Richards said: “We will not be increasing PI premiums for those that choose to remain independent.”
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More in this guide
- Q: What does independent mean?
- Q: What do I have to do to be independent post 2012?
- Q: What are the pros of being independent post 2012?
- Q: What are the cons of being independent post 2012?
- Q: What does restricted mean?
- Q: What do I have to do to be restricted post 2012?
- Q: What are the pros of being restricted post 2012?
- Q: What are the cons of being restricted post 2012?
- Q: What impact will being restricted have on PI insurance?
- Q: What impact does my status have on how I charge clients?
- Q: What are the qualification requirements for advisers?
- Q: How should I explain my status to my clients?
- Q: Can I be both independent and restricted?